When a listing says “freehold”, “leasehold” or “commonhold”, it is describing the legal structure behind the home. The label affects how long ownership lasts, how shared parts are managed and what payments or rules may apply. For flats, it is especially important to look beyond the headline price and read the title and governing documents. This guide focuses on England and Wales; property law and terminology differ elsewhere in the UK.
Freehold: ownership without a fixed lease term
A freehold owner generally owns the property and the land it stands on for an unlimited period. A freehold house usually has no lease expiry date, ground rent or lease service charge. That does not mean there can never be shared costs or restrictions. Newer estates may have private roads, landscaping or other communal facilities funded through estate-management arrangements, and planning rules, covenants and other legal rights can still limit what an owner may do. Check the title, transfer documents and any estate-charge arrangements rather than assuming that “freehold” means no ongoing obligations.
Leasehold: a right defined by the lease
A leaseholder has the right to occupy and use a home for the remaining term set out in a lease. Most flats have traditionally been sold this way, although houses can also be leasehold. The lease sets out rights and responsibilities, which may include service charges, ground rent, building insurance arrangements, permissions for alterations and rules for using the home. The freeholder owns the superior interest; a managing agent may handle day-to-day administration.
The term matters because it reduces over time. Before buying, ask how many years remain and obtain the lease and current service-charge information. Review the ground-rent terms, planned major works, reserve fund, insurance, restrictions and any disputes. A short lease or unusual payment clause can affect future costs, mortgage availability and resale, but the effect depends on the particular property and lender. Take independent conveyancing advice before committing.
Commonhold: freehold homes with shared governance
Commonhold is a form of freehold ownership designed for flats and other properties with shared parts. Each owner holds their unit indefinitely, while a commonhold association made up of unit owners is responsible for the shared structure and facilities. The Commonhold Community Statement sets out the rules and how the building is run. Owners contribute to shared costs and take part in decisions through the association. Commonhold is not simply a lease with a different name: it replaces the third-party freeholder structure with collective ownership and management.
Commonhold already exists in law in England and Wales, but it has been used far less widely than leasehold. The government has published proposals to make a reformed commonhold model the default for new flats and to ban most new leasehold flats. Those proposals are not themselves a rule that buyers can assume is already in force. Check the legislation and commencement dates applying when you buy.
What leasehold reform means today
The Leasehold and Freehold Reform Act 2024 is being brought into force in stages. Government guidance lists some measures that are already active, including removal of the two-year ownership requirement for qualifying lease-extension and freehold-purchase claims, and changes to Right to Manage. Other measures, including parts of the revised valuation process, require further regulations or legislation. Separate proposals on wider ground-rent caps and commonhold reform should be treated as proposals unless and until they become law and commence. Do not calculate a purchase or extension price on the assumption that every announced reform is currently available.
A practical checklist
1. Ask the seller or agent to confirm the tenure and obtain the title documents. 2. For leasehold, check the unexpired term, ground rent, service charges, insurance and planned works. 3. For a freehold estate, find out whether private roads or facilities carry a management charge. 4. For commonhold, read the Community Statement, accounts, budget and association rules. 5. Ask a conveyancer to explain the documents and identify any unusual obligations before exchange.
Tenure alone does not tell you whether a home is a good purchase. The documents, building condition, costs and your circumstances all matter. The GOV.UK leasehold toolkit explains current rights and future reforms, while the government’s commonhold guidance describes the existing structure. This is general information, not legal or conveyancing advice; seek independent professional advice for a specific property.